Earnings Transcript for CCO - Q4 Fiscal Year 2022

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Clear Channel Outdoor Holdings, Inc. 2022 Fourth Quarter Earnings Conference Call. [Operator Instructions] I’ll now turn the conference over to your host, Eileen McLaughlin, Vice President of Investor Relations. Please go ahead.

Eileen McLaughlin: Good morning, and thank you for joining our call. On the call today are Scott Wells, our CEO; and Brian Coleman, our CFO. Scott, and Brian will provide an overview of the 2022 fourth quarter operating performance of Clear Channel Outdoor Holdings, Inc. and Clear Channel International BV. We recommend you download the earnings conference call investor presentation located in the financial section in our investor website and review the presentation during this call. After an introduction and a review of our results, we'll open the line for questions. And Justin Cochrane, CEO of Clear Channel UK and Europe, will participate in the Q&A portion of the call. Before we begin, I'd like to re remind everyone that during this call, we may make forward-looking statements regarding the company, including statements about its future financial performance and strategic goals. All forward-looking statements involve risks and uncertainties, and there can be no assurance that management's expectations, beliefs, or projections, will be achieved, or that actual results will not differ from expectations. Please review the statements of risk contained in our earnings press release and our filings with the SEC. During today's call, we will also refer to certain performance measures that do not perform to Generally Accepted Accounting Principles. We provide schedules that reconcile these non-GAAP measures with our reported results on a GAAP basis as part of our earnings release and the earnings conference call investor presentation. Also, please note that the information provided on this call speaks only to management’s views as of today, February 28, 2023, and may no longer be accurate at the time of a replay. Please turn to Slide 4 in the investor presentation, and I will now turn the call over to Scott Wells.

Scott Wells: Good morning, everyone, and thank you for taking the time to join today's call. Our fourth quarter results capped off a strong year for our company, as we soundly rebounded coming out of the pandemic and benefited from healthy demand for our digital assets. We generated consolidated revenue of $750 million, excluding movements in foreign exchange rates, in line with our guidance, and up approximately 1% as compared to our very strong performance in the fourth quarter of the prior year. Our consolidated revenue was also ahead of the fourth quarter of 2019, excluding movements in foreign exchange rates in China. We delivered a record revenue quarter for our Americas business against a record performance in the fourth quarter of the prior year. Our European business also delivered strong revenue results despite European turbulence and the ongoing strategic review of our businesses in Europe. For the full-year, consolidated revenue was up 16.5%, excluding movements in foreign exchange rates. I'd like to thank our company-wide team for their dedication and hard work in executing on our strategic plan, and contributing to our results during the past year. We operated at a high level as we progressed in our transformation into a technology-fueled visual media powerhouse, reaching a growing pool of advertisers, and we did this while improving productivity. Our story is both an operating one in terms of our efforts to increase revenue, drive further gains in productivity, and increase operating cash flow. It's also a capital structure one in terms of our focus on evaluating all options to improve our leverage ratio and reduce our debt. On the operating side, investing in our digital transformation remains central to our plan, including expanding our digital footprint, strengthening our data analytic offerings, and continuously improving the customer experience. We believe we are elevating our ability to provide our clients with the kind of experience they expect from digital media, coupled with the mass reach of out-of-home. And our experience to date tells us these efforts are leading to growth. During the fourth quarter, digital accounted for 43% of our consolidated revenue, which rose 4% during the quarter, compared to the fourth quarter of last year, excluding movements in foreign exchange rates. As we expand our digital footprint, we're continuing to develop a more addressable and efficient operating platform. We're making our solutions more data-driven, easier to buy, and faster to launch. These initiatives are allowing us to convert more revenue to cash flow and better leverage our scaling reach, while demonstrating results in ways that elevate the attractiveness of out-of-home advertising. We believe these efforts supported our outperformance relative to the majority of other traditional media platforms in the past year. As we execute on our plan, we believe we can drive improved operating cash flow over time, given the operating leverage and strong fundamentals inherent in our model, as shown in the long-term guidance we provided last September, and are confirming today. Beyond operating execution, we're also committed to continuing to review avenues that will enable us to establish an appropriate capital structure that we believe maximizes the value inherent in our business. At the close of the year, we announced the definitive agreement to sell our business in Switzerland for $92.7 million, which remains subject to previously disclosed closing conditions. We intend to use the anticipated net proceeds to improve our liquidity position, while our strategic review of our low margin and low priority European businesses remains ongoing. As we said, our intention for Europe is to have a perimeter with substantially higher adjusted EBITDA minus CapEx margins, which is expected to help improve our leverage over time through the generation of operating cash flow and net sales proceeds from potential dispositions. As we have previously emphasized, we cannot guarantee the timing or success of our efforts, and we will continue to communicate further details as and when we are able. Turning to the year ahead, our business remains healthy, with revenue expected to reach between $2.575 billion and $2.7 billion, excluding movements in foreign exchange rates. In the U.S., we're wrapping up the best upfront since we've started measuring, and our premium locations are strong, although a few categories are reducing or delaying campaigns. And, as a reminder, the first quarter faces tough comps with the prior year. Specifically, on a national basis, we are seeing softness in the first quarter due to crypto and emerging tech companies pulling back on significant spending relative to the first quarter of 2022. So, at this point, we're not seeing any major changes from a macro slowdown. Rather, the impacts we're seeing relate to dynamics within specific categories. Dialogue with advertisers remains very constructive, and in fact, we are continuing to develop new categories and broaden the universe of advertisers we can pursue. In Europe, we've maintained some of the momentum we saw in Q4, and we're seeing healthy demand with no indications of a slowdown due to macro concerns. Based on our conversations, brand owners have indicated that they will continue to advertise as they recognize both the need and opportunity to remain visible. I should note that we also have an easier comp in Europe given all markets hadn't fully rebounded in last year's first quarter. So, overall, Europe is off to a good start, and January came in marginally better than our expectations. As we execute our plan, we are keeping a close eye on trends across our markets, and remain optimistic about our business. Brian will provide our guidance for both the first quarter and the full-year. And with that, let me now turn it over to Brian.

Brian Coleman: Thank you, Scott. Good morning, everyone, and thank you for joining our call. Please turn to Slide 5. This has been a good year for our business. And so, before going through our fourth quarter results, I want to comment briefly on the full-year results. As you know, we provided detailed guidance for 2022 during our Investor Day, which was updated on November 8. I want to point out, our actual results were in line or ahead of guidance for every metric included in the guidance. In my view, this clearly demonstrates the resiliency of our business and the team's ability to remain on course and rebound from the pandemic. Now, on to fourth quarter reported results. As a reminder, during our discussion of GAAP results, I'll also talk about our results, excluding movements in foreign exchange rates, a non-GAAP measure. We believe this provides greater comparability when evaluating our performance. Direct operating expenses and SG&A expenses include restructuring and other costs that are excluded from adjusted EBITDA and segment adjusted EBITDA, and the amounts I refer to are for the fourth quarter of 2022, and the percent changes are the fourth quarter of 2022 compared to the fourth quarter of 2021, unless otherwise noted. Additionally, Switzerland, which is now considered an asset held for sale, will continue to be reported in revenues and adjusted EBITDA until we conclude the sale. During the fourth quarter, we expanded the number of segments in our reported results. We now have four reportable segments

Scott Wells: Thanks, Brian. We're off to a good start and believe 2023 will be a positive year for the business, despite some uncertainties regarding the macro environment. Supported by a great team and assets, we remain centered on executing against our strategic priorities, including accelerating our digital transformation, improving customer centricity, and driving executional excellence. We believe these efforts are enabling us to elevate the experience and results we deliver to our clients, and broaden the pool of advertisers we can pursue. At the same time, we remain committed to addressing our capital structure, divesting our lower margin and lower priority European businesses, and taking the necessary steps to support cash generation of our core business, and ultimately reduce our debt. And now, let me turn the call over to the operator for the Q&A session, and Justin Cochran will be joining us on the call.

Operator: Thank you. [Operator Instructions] Our first question today comes from Ben Swinburne from Morgan Stanley. Your line is open.

Ben Swinburne: Good morning. Scott, maybe one for you to start us off here. Can you talk a little bit about how you're thinking about the shape of the year? You mentioned the first quarter, particularly in the U.S., faces some category-specific headwinds. But talk about your visibility into Q2 and beyond. And it sounds like you expect the year to improve from a growth perspective as we move through the year. And then, maybe since we now have your Airport segment, which reported pretty massive growth last year, obviously, port authority contributing, can you talk a little bit about the outlook for that business as we look into ‘23 and ’24? What kind of expectations should we have? And is there other business out there you may be bidding for that might be material? Anything you could share with us on the outlook for airports I think would be helpful, too.

Scott Wells: Thanks, Ben. Good morning. So, for the shape of the year, it is a - sort of Q4 and Q1 have been a little bit of a pause in the momentum that we have seen in the business over the last five or six quarters, and I think it's attributable to a couple of things. It’s pretty narrow and it's pretty account-specific. And so, particularly as I look at Q1, it's the emerging tech companies and the crypto companies. We never really had that much exposure to sports betting, but that was always - that was also one. There were just a few categories that were kind of ephemeral in Q1 of last year that have - well, I’ve proven ephemeral. We didn't know they were ephemeral in Q1. And that's creating a little bit of slowness end of last year, beginning of this year. But that's offset by what I referred to in the prepared comments that we had our best upfront ever and our visibility into the rest of the year is strong. And so, what we believe is happening is that you had a bunch of companies make announcements about layoffs and things like that, and people don't tend to want to do advertising heavily while there are layoffs. You had the companies that had the dynamics I described a moment ago. And so, it’s a market that thinned out a little bit versus where it was a year ago. But the laydown for 2023 is strong and the dialogues and plans people have are strong. I guess the other thing I'd call out is the film release schedule wasn't stellar sort of late last year, early this year, and that's obviously an important category for us, particularly in a couple of our bigger markets. So, all of those things combined, make us think that what we're seeing in terms of a little bit of softness here at the beginning of the year, is not going to be how the year as a whole builds, and we guided accordingly on that. So, I think our guidance truly represents the best information that we have at this moment. To your question on our Airport segment, a couple of things I'd call out. I think we've kind of mentioned this, and we certainly mentioned it when we were doing our Investor Day in September, but we are selling airports differently than we might have sold airports five years ago. We've gotten more creative in terms of looking for kind of sponsorship type, think of things like naming rights kind of things. That business has gotten a lot more digital, and it's gotten - coming out of COVID, it's had a very strong tailwind as travel has taken off. I mean, travel's been one of our hot verticals for the last few quarters. And certainly, we've seen that play through in airports. But when I look at airports, we don't really get into talking about contracts because there's not - kind of none of them, with the possible exception of New York, would count as material, and there's kind of relatively regular ins and outs. There's nothing I'd call out in terms of our renewal schedule the next year that's going to be meaningful. But I would note that we did just go live in Newark Terminal A in Q1 of this year, and there's still buildout happening on the New York Port Authority contract. So, that still has some room to run. I guess I'd be remiss if I didn't mention the other big innovation that we've made, and it's been meaningful, has been doing more selling by the America sales force into the airports. So, we have cross-selling between the America sales force and the airport sales force, and that's gotten pretty meaningful, and that's something that five years ago was almost negligible. So, I think all of those things give us some room to run in terms of further growing that airports business.

Ben Swinburne: Got it. Thanks so much.

Operator: We now turn to Steven Cahall from Wells Fargo. Your line is open.

Steven Cahall: Thank you. Maybe first just to go a little deeper into some of Ben's questions. So, you talked about there being some of these pockets of softness in the U.S. I think you said that you had fewer headwinds and an easier comp in Europe. So, maybe, how do we just think about within the growth guidance, whether it's for Q1 or the full-year, how to think about Americas versus Europe. Could we see Europe outgrowing Americas, which is usually not the case on an organic basis. So, would love to get some commentary there. And then, Scott, and Brian, you've started giving the AFFO metric, and it would certainly seem like future potential for a REIT structure could create a lot of value for the company. I think debt is still the big obstacle. And Brian, if I maybe read into some of your comments, it sounds like you might still have some ideas of things you can do this year beyond the Swiss divestiture to manage the balance sheet. So, I'm just curious what options you think you've got this year to start to shape the balance sheet to a little lower level of leverage. Thank you.

Scott Wells: Thanks, Steve. Good morning. So, let me take the first part, and I'll let Brian take the second part. Recall that - it seems like ancient history, but Q1 of last year is when the infamous Omicron was with us, and that hit Europe considerably harder than it hit the U.S. And so, you have a - it's just a math exercise a little bit going on. And particularly, there were countries within Europe that were differentially hit with Omicron. And so, when you think about Q1, you should probably expect that Europe will be outgrowing the U.S., again, net of currency. I mean, currency always confounds exactly how those numbers are going to go. But that's probably not an unreasonable way to think about it. And that's actually true a little bit as you think about the full-year because obviously Q1 is part of the full-year, and there are geographies in Europe that still have not fully recovered from COVID. Parts of Europe have recovered and are way, way ahead of 2019. Not all parts are. And so, there's probably a little bit of a mix toward Europe in that revenue mix. It's not massive, but we were very specific in giving consolidated guidance just because there are so many moving pieces across the portfolio. But we did build it, obviously, kind of bottoms-up, but it becomes very unwieldy to try to guide in lots of little sub-segments. So, that's why we did it as a whole. But hopefully, that gives you a flavor for the mix. And I'll hand it to Brian to ask or to address the second question.

Brian Coleman: Sure. Thanks, Steve. I think our path to REIT optionality is both a deleveraging story, and then obviously getting the size of the portfolio of REITable assets to the right level. And so, the strategic review going on in Europe is obviously an important element to that. And while the ultimate resolution, if it's through asset sales, is probably not directly deleveraging, at least not meaningfully so. It does carry with it reduced capital expense, simplification of the business, a lowering of corporate costs. And so, I do think visibility into the ultimate outcome there will be an important consideration as we look to other options to delever. And other options may be needed, and all options are on the table, but I think it'd be premature right now to really kind of dive into those. The company has some runway. We've got the process going on and we're going to be open-minded about the things that we can and need to do to delever the balance sheet. But it's really that and getting the asset base in the right place being the two obstacles, so to speak, to putting ourselves in a position where we could eventually REIT this business.

Steven Cahall: Great. Thank you.

Operator: We now turn to Lance Vitanza from Cowen. Your line is open.

Unidentified Analyst: Hi, good morning. This is Jonathan on for Lance. My first question is really on the new segment reporting. Just curious to know, like what led to the new breakout?

Scott Wells: It’s a determination management makes based on really how we manage those businesses and how we allocate resources. So, the three elements were breaking out airports, and I think the size of that business also contributed to decision to break that out. The second piece was the division between Europe North and Europe South. And I think the numbers kind of historically speak to the differences in those business and the logical management and differential allocation of resources. And then the third piece is taking Singapore out of the Europe category, putting it into other - that decision probably speaks for itself. But it really is a management determination based on those criteria.

Unidentified Analyst: Okay. Can we expect much rent abatement in both the Americas and Europe going forward? I know from the slide in your presentation, it appears that Europe has largely tapered off, and while there's still some in America, I kind of just want to get a better feel for that trajectory in ‘23.

Scott Wells: Well, you're right in that they've largely tapered off in Europe, and I think that same kind of tapering off should naturally occur in the Americas. The thing I’d point out is obviously, this is something that we want to do and we'll vigorously pursue opportunities where we feel it's appropriate, and there are still some out there in Americas that we’ll continue to pursue, but they will largely continue to diminish over time.

Unidentified Analyst: Okay. And my last one, just given the higher rate environment, does that necessarily trigger any change to strategic priorities, given that the eventual need for - to refinance at higher rates? Does that change the story at all, or no?

Scott Wells: Well, it's a significant consideration. Our interest expense has gone up. But maybe even more importantly, the level at which you could assume refinancing to occur, is probably at a higher point than it would've been say a year ago. So, it's definitely consideration in the things we look at. It is a headwind to free cash flow generation. That all being said, we do have a runway, and there are a lot of moving parts in the business right now. So, I wouldn't say that it necessarily has led to a change in our strategic thinking, but it certainly is an important consideration and that we are certainly thinking about.

Brian Coleman: Yes, I mean, I think Jonathan, the only thing I'd add on that one is, a year ago, who would have forecast rates would be where they are right now? And we are still a couple years from where we're going to need to engage. And so, this is a slow as smooth, smooth as fast sort of scenario, to borrow from my special operations friends. We will be watching the market very carefully on this, and we'll do the appropriate action as our window approaches more closely.

Unidentified Analyst: Understood. Thank you.

Operator: Our next question comes from Avi Steiner from JPMorgan. Your line is open.

Avi Steiner: Thank you. Good morning, everyone. A couple of quick ones for me. One, on the company's full-year guidance, it looks like, at least at the midpoint, margin is slightly lower year-over-year. And I just want to make sure I understand the puts and takes from ‘22. Obviously, some rent abatements being a part of the issue, or less of them. I assume airports growth. So, I'm curious if I'm missing anything else, then I've got a couple more. Thank you.

Scott Wells: Yes. I think we talk about the abatements falling away, as you pointed out, the mix as airports grows. And I think the other thing we've mentioned is, we have a major contract in the US that has gone through a renegotiation, and that's been a little bit of a headwind. So, it's really - it's those three things that are headwinds on EBITDA margins. So, I think you're thinking about the right way, Avi.

Avi Steiner: Okay. That's terrific. And then one of your peers talked about, I guess the programmatic channel being a little bit softer. I know it's not a massive part of the business, but curious what you guys are seeing there and how you see that playing out this year?

Scott Wells: So, yes, no question, 2022 did not have the kind of growth in programmatic that we might have anticipated for the year. But as you'll see in our proxy, we actually delivered on our plans despite that. So, the point being, the second thing you said, which is it's not that big a part of the mix. I actually would tell you, the programmatic market right now is pretty solid. It's not - again, it’s hard to compare a Q1 to a Q4 ever, but it certainly is showing some decent growth right now. So, I don't think that we're counting on it to be a massive part of the guide that we gave, but there's no indication that it's in a bad place, I guess, is how I'd characterize it.

Avi Steiner: Great. And last one for me, and thank you for the time. Use of proceeds from the Switzerland sale, recognizing you can reinvest that in the business. I'm just curious if we should ultimately be thinking about it as targeting the CCI BV notes and future asset sales out of that entity, and thank you again.

Scott Wells: Yes. I think we've talked about how we’re planning to reinvest those proceeds in the business, which is permitted under the various montage interest, including the CCI BV indentures, how that will free up cash flow from the European operations that would've otherwise been used to fund those investments. I think right now, given the kind of the current environment, we’ll probably bolster liquidity with those proceeds, with that cash that isn't otherwise used once the sale of Switzerland occurs and is completed. But that could change over time and they'll be available to use throughout Europe for additional reinvestment and other things, including debt repurchases of the CCI BV notes. But it's probably premature really to go there yet. I think right now, it’s liquidity optimization once the deal actually closes.

Avi Steiner: Thank you very much.

Operator: Our next question comes from Richard Choe from JPMorgan. Your line is open.

Richard Choe: Hi. I just wanted to ask for the guidance, should airports be up for the year and then digital to be up and non-digital to be flat? Is that kind of implied in the guidance?

Brian Coleman: Well, we provide consolidated guidance, Richard, but we don't really break it out. I think airports is performing well. And as Scott previously mentioned, there's still some room to run an airport. So, I think we will - we're positive on that business. I don't know, Scott, about the digital, non-digital color going forward, if there's anything to say to that.

Scott Wells: Yes. I mean, just on the dynamic. I mean, you've seen steady and increasing rapidity of our business becoming more digital over time. I mean, you see the penetration. I think the reporting will be illuminating to some folks on how penetrated some parts of the portfolio are of digital airports in Northern Europe being particular standouts in that category. So, yes, digital is a growth part of the story, but we've been pleased by how our non-digital has held up. Much of the 2022 performance in the non-digital was kind of category-driven by some of the mix shift we had in our advertiser base. And that should sort of wash out as we get into 2023. So, I think our consolidated guidance and our consolidated guidance is trying to give you some color on some of the underlying dynamics.

Richard Choe: Got it. Thank you. And then in Europe, is there more room to rebound in Southern Europe than Northern Europe, or how should we think about the two for the year? I’m not trying to get guidance, but just in terms of opportunity versus last year.

Scott Wells: Yes. I mean it’s interesting as you think about rebound, but I think in general, yes, would be the answer to that question. And there are some contract puts and takes. That's always a dynamic within Europe, and I think we called a couple of them out in the comments in terms of where things are. But yes, in general, Southern Europe has recovered more slowly from COVID, and that should have an opportunity in those markets this year.

Richard Choe: Great. Thank you.

Operator: [Operator instructions]. We now turn to Jim Goss from Barrington Research. Your line is open.

Jim Goss: Thank you. Regarding the split of north and south for Europe, is it because of geographic operating similarities, or does it have any implications as to how you might decide to market the properties as you do this evaluation and increase the core of US?

Scott Wells: Yes. Jim, the decision to have this segmentation is really driven by accounting considerations and the way we manage the business. So, that is true. Now, part of that differentiation in management and differentiation in the allocation and resources can be tied to other things. But largely - and by the way, I think the segment reporting and the difference, particularly in Europe between the north and the south, gives some color into the different operating characteristics in those different regions. But it really is one of how we manage the business, who manages the business, what kind of resources we allocate to those businesses that drives the segment reporting, not - what you're targeting for sale or not. Hopefully that helps.

Jim Goss: Okay, yes. And you just mentioned air airports in Northern Europe as a standout in terms of digital. You have roughly 42% of revenues both in US and Europe accounted for, are contributed by digital. And I wonder, is that pretty consistent by geography and category? Or, and how does that drive your expansion opportunity as you’re allocating capital?

Scott Wells: So digital is very different by geography, by contract, by sort of situation. And we do believe that ongoing digitization of this business is an opportunity. We are very penetrated in digital in the UK. Airports has become increasingly digital, and as you get into newer airports, they're increasingly digital too. So, kind of, as you refresh contracts in any of those places, you're going to see digital on the expansion. Obviously, in the America business, that's where the big regulatory constraint is. And some of the countries in Europe, there are regulatory constraints on being able to do digital. But we're finding over time, as more and more places have the experience that airports in the UK are having, that we're able to increase usage of digital. And clients do really like the immediacy of it. They like the flexibility of it. They like the creativity of it, the ability to, you know, day part messages to have a different message in the morning than the afternoon, those sort of things. So, the features of it we think are things that the customers like. So, we're going to continue to go in that direction as we can. But it is very different by geography, and there's not kind of an easy summary way to give you an answer to what I think you're going for in the question. But it is definitely different by geography.

Jim Goss: Okay, thanks.

Operator: Our next question comes from Jason Bazinet from Citi. Your line is open.

Jason Bazinet: I just had a quick question on organic growth both for last year and what sort of organic growth is embedded in your guidance for this year. And in particular, I was just interested in how, if at all, inflation, both last year and your expectations this year, sort of influence your ability to take rate and influence the organic growth expectation.

Scott Wells: So, thanks, Jason. We absolutely saw a strong rate environment, and frankly continue to see a good rate environment. Again, where there's softness, it’s a little bit idiosyncratic right now. It's not widespread. And you think about one of the drivers of the really strong upfront that we've talked about is that we have been seeing good rate increases. It's not as simple as just inflation, but that certainly makes it a little bit easier of a conversation. Obviously, the transition from COVID environment to the environment we were in in kind of second half 2021, first half 2022, to what I'd characterized as us approaching a more “regular,” regular is a dangerous word, but we’re getting into more of a regular trading environment. And so, rate increases will probably be more challenging over time as we see that, because it's not as straightforward as just inflation is X, so therefore rates going up Y. There's a lot of segmentation of our assets in terms of location, and it has been a very premium market in terms of advertisers looking for the very, very best locations, and that creates a rate. So, I guess what I'd tell you is that we are very focused on rate. We look to - we're very focused on yield, rate being an important part of generating yield. And we expect that we will continue to be able to drive yield in 2023. Hopefully that gives you something. I'm not sure if that was the exact spirit of your question.

Jason Bazinet: Yes, it seemed like you guys had - I mean, the industry, I felt like had pretty good pricing power, but it sounds like that's going to moderate a bit, but you're still going to be able to generate organic growth, I guess, is the takeaway for ‘23.

Scott Wells: Yes. And I mean, I at least think of our digital conversions as organic growth too, because it's not acquisitions and the paybacks are very attractive. So, it's not - the growth doesn't just come from rate, I guess, is the point I'd make to you.

Jason Bazinet: Understood. Okay. Thank you.

Operator: This concludes our Q&A. I'll now hand back to Scott Wells, CEO, for any closing remarks.

Scott Wells: Great. Thank you very much. We appreciate you all joining our call today. We do feel good about the year that lies ahead and are optimistic and look forward to updating you as the year develops on the various strategic initiatives and operating initiatives that we touched on. Have a great day.

Operator: Today’s call has now concluded. Participants, you may now disconnect your lines.